Don't Get Caught In This Market Bull Trap!?
In a Nutshell
Markets rallied 1.5% on weak jobs data (29K vs 90K expected, unemployment 4.2%), cutting Fed rate hike odds from 75% to 19.5% as "bad news is good news" for lower rates. Semiconductor memory stocks like Western Digital (-12%) and Micron sold off on Toshiba supply increases, while broader tech stayed green. The speaker warns this rally could reverse quickly with upcoming CPI data and Middle East escalation, urging traders to size positions conservatively.
These notes were generated by AI and may contain inaccuracies.
Markets rallied after today's labor market reports. NASDAQ markets QQQ is up 1.55%. Semiconductor chip stocks traded slightly in the red. Micron Technologies traded slightly in the red. The speaker was up $4,100 in today's live trading session with the LPP team.
Micron Technologies was shorted as it sold off. News affected companies like Western Digital and Seagate (referred to as "Sealgate"). Western Digital was down 12.26%. The big news is Toshiba announcing they will be ramping up their supply for 2027. If demand stays relatively the same but supply begins to increase, there might become an overflow or over supply of these new chips.
Micron and SanDisk are different kinds of memory chips. NASDAQ, Google, and Meta were all in the green while semiconductor memory chip stocks like Western Digital (down 12%) and SanDisk (down 2%) were in the red.
Look a little bit further and make sure to fully understand investment or trade positions. The thing to understand fully is what was announced today.
Non-farm payrolls were supposed to be 90,000 but only added 29,000, weaker than expected. Expected unemployment rate to go from 4.1 to 4.1 (no change), but came in at 4.2. Unemployment came in higher. This represents the "bad news is good news" scenario for the labor market.
The big focus right now is the Federal Reserve, with labor market and inflation being the two main focuses.
At the start of the week, there was a 75% probability that the Federal Reserve was going to raise interest rates. That probability has dropped to 19.5% because of the PCE report received this week and the series of labor market reports that have proven the labor market might be too weak to actually raise rates.
Unemployment reports came out today and markets rallied even though the unemployment report and non-farm payrolls came in weaker than expected.
"Imagine a game where everyone's waiting for the teacher to say if recess gets shorter. Weaker jobs numbers sound bad, but the market heard something else. If people aren't getting hired as fast, the Fed probably won't raise interest rates. Lower rates mean cheaper money, and cheaper money makes stocks, houses, everything feel more fun to buy. So, the bad news was really good news in disguise."
Weaker jobs can flip fast. If inflation comes back or the Fed gets spooked by something else, that rate cut hope evaporates and longs get hit hard. Don't treat today's rally as a green light forever. Size positions like you might be wrong.
The speaker uses Grockbot as a trading assistant. The template used will be shared. For beginners in the stock market, it's useful to brainstorm ideas with, but decisions should not be made solely based off of it. It's cool to be able to bounce ideas and get information from it. The Grockbot will be linked in the comments section.
NASDAQ market is up 1.5% on a Friday. With escalations in the Middle East, oil prices and diesel prices are still expected to go higher. There could be a correction. It looks like early stages of a possible pullback, but this is far from going into the red. Micron is fully selling off.
What might be good news today driving markets up higher can completely shift by next week as more labor market reports and inflation reports come in. The upcoming CPI data report is not going to most likely be like the PCE report because they're not changing the way it's measured. That's the only reason this week's inflation report actually came in lower than expected.
Live trading occurs every morning with the LPP team. Breaking down to $130 a day, the second link in the description. There is a new sale live for October. Webull users will receive $1,000 this Sunday. One user will be randomly selected that uses the Webull link (first link in description), signs up for Webull, and has a qualified deposit. New users only. Deposit can be five dollars or a hundred dollars. Friends or family can share the link, but they need to use the link and have a qualified deposit by today as it's the last business day before the winner is announced on Sunday. Questions can be directed via Instagram.
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